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The first Director’s and Officers’ Liability policies were issued by Lloyd’s Under-writers in the early 1930s. Little interest was taken in them until the late 1950s when directors and officers were beginning to be sued. Thereafter the tempo quickened and Directors’ and Officers’ Liability insurance became an established class of business in the USA earning substantial premiums. Now the wheel has turned full circle. The increasing number of claims and the cost of their settlement has caused insurers to cut back on their activities. Some insurers have withdrawn completely whilst others have limited their capacity. Such is the litigious nature of the United States that many directors taking up appointments will refuse to do so unless there is evidence of insurance coverage.
Outside the USA and particularly in the United Kingdom Directors’ and Officers’ Liability insurance is slowly emerging as a class of insurance in its own right. But it is a form of insurance where insurers have much to learn and where in many instances they are guided by thinking in the U.S.A
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